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    Government to create 3,500 FPOs in 3 years to help boost farmer incomes

    Synopsis

    Recently, the Commission for Agricultural Costs and Prices (CACP), which recommends minimum support price (MSP) for crops, asked the government to promote formation of commodity-specific FPOs under “One-Product One-District” initiative to improve backward and forward linkages, and convergence of FPOs promoted by various agencies.

    New Delhi: The government is looking to create 3,500 farmer producer organisations (FPOs) in next three years to ensure farmers get remunerative prices for their produce, a top official said.

    “Most of these FPOs will be based on government’s one-product-one-district initiative where in FPOs will primarily promote and trade particular commodity besides other produce in small quantities,” said Neel Kamal Darbari, managing director of Small Farmer Agribusiness Consortium, the government’s nodal agency for promoting FPOs. “This will help clusters and FPOs in getting identity,” she said.

    An FPO, formed by a group of farm producers, takes care of their business activities.

    FPOs will acquire a larger role now as the government has allowed agriculture trading outside APMC premises, Darbari said.

    “FPOs act as aggregators of farmers with more bargaining power than individual farmer,” she said. “FPOs can trade directly with corporates, large processors and millers from farm gate for getting maximum value for the produce. It will remove all the intermediaries and execute tax-free trading.”

    Finance minister Nirmala Sitharaman had in her budget speech announced a plan to help create 10,000 FPOs in five years.

    Recently, the Commission for Agricultural Costs and Prices (CACP), which recommends minimum support price (MSP) for crops, asked the government to promote formation of commodity-specific FPOs under “One-Product One-District” initiative to improve backward and forward linkages, and convergence of FPOs promoted by various agencies.

    A senior agriculture ministry official said the government is taking a cluster approach for creating FPOs. “For example, we would promote chilli-specific FPOs in Guntur district of Andhra Pradesh. Similarly, FPOs dealing with mangoes in Uttar Pradesh, and kesar in J&K would be handheld,” the official said. “This cluster based approach will help farmers growing similar crops with collective negotiation power.”

    Currently there are around 5,000 FPOs functional in the country with 910 of them affiliated to Small Farmers' Agri-Business Consortium (SFAC) while around 3,000 are with National Bank for Agriculture and Rural Development (Nabard). The remaining FPOs have been created and run by private companies.

    “FPOs will be instrumental in raising income of farmers,” Darbari said. “Government has a big focus on strengthening FPOs. There is a need to provide professional managerial support and adequate access to capital and infrastructure facilities for strengthening market linkages and sustaining business operations,” she said.
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    2 Comments on this Story

    T S Darbari222 days ago
    Good Initiatives.
    sunil yadav222 days ago
    Nice
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